New York Governor Kathy Hochul signed Proof-of-work (PoW) mining moratorium on November 22becoming the first US state to ban any PoW cryptocurrency mining activity for two years.
The PoW mining moratorium will not only ban new mining operations, but will also deny license renewals to those already operating in the state. Any new PoW mining operations in the state will only be able to operate if they use 100% renewable energy.
The PoW mining bill was first passed by the state assembly in April of this year and subsequently passed the state senate in June. Finally, Governor Hochul signed the bill into law due to pressure from lobbyists and to meet her carbon emissions targets. hochul wrote:
“I will ensure that New York remains the center of financial innovation, while taking important steps to prioritize protecting our environment.”
Consensus PoW mining is predominantly used by miners of bitcoin (BTC) and some other altcoins.. It is considered one of the most secure and decentralized ways to authenticate a transaction on a blockchain. However, this practice has been clouded by controversy over its high energy consumption.
The United States is currently leading the bitcoin mining hash rate share by country, with 37.8% of the Bitcoin network hash rate share coming from the US. The two-year moratorium on PoW mining could prove costly and even create a ripple effect for other states to follow a similar path..
Blockchain advocacy group, Chamber of Digital Commerce, gave his opinion on the false narrative in a Twitter post:
“The state’s argument that the mining industry’s energy use is exponentially higher than other industries is blatantly false. The Climate Leadership and Community Protection Act requires that NY greenhouse gas emissions be reduced by a 85% and reach net zero emissions in all sectors by 2050”.
The FUD of PoW mining is nothing new and has been debunked many times, however there has been a significant lobbying effort in the last year, especially from proponents of proof-of-stake (PoS) mining. Chris Larsen, co-founder of Greenpeace and Ripple, has campaigned to change the bitcoin code.
Lawmakers, on the other hand, have conveniently set aside available research reports indicating that a significant portion of bitcoin mining power comes from renewable sources. The bitcoin mining council report highlighted that more than 60% of the electricity consumption of the BTC network comes from clean sources..
European cryptocurrency regulators had proposed a similar ban on PoW in their Markets for Crypto Assets (MiCA) legislation. Nevertheless, proponents of a ban on PoW-based digital asset trading could not muster enough support, so the MiCA legislation was passed without such a ban.
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